ZIMBABWE – Simbisa Brands, Zimbabwe’s largest fast-food restaurant operator has reported a 101% rise in the group’s half year revenue for the period ended 31 December 2020 to ZWL 8 billion (US$22.1m) from ZWL 3.9 billion (US$10.7m) of the corresponding period in 2019.
The growth in earnings was reflected in its home country Zimbabwe, recording a 44% rise in revenue mainly driven by a 56 percent increase in average spend despite customer counts falling by 7% year on year.
Its overall operating profit increased by 75% while profit attributable to shareholders and headline earnings increased by 91% to ZWL 844 million (US$2.3m) and 150 cents respectively.
Cash generated from operations was strong at ZWL 2 billion (US$5.5m), a rise of 300% while total capital expenditure for the period was ZWL 644 million (US$1.77m) with Zimbabwe accounting for ZWL 250 million (US$690,000) while the remainder went to the region.
The group implemented cost saving measures while its delivery sales increased during the period which helped offset the impact of lost customer count due restrictive trading conditions.
The food service operator highlights that the period under review was extremely challenging due to the effects of the Covid-19 pandemic restrictions on operations and trading hours, but it managed to produce a pleasing performance.
“In the period there was a steady lifting of Covid-19 trading restrictions in most of our Regional markets, with all stores operating over the period.
“Trading hours restrictions remained in Kenya and Namibia although they were progressively relaxed. Sit-down service restrictions have been lifted in all our markets, albeit at reduced capacity to maintain safe social distance,” stated Simbisa Brands Chairman Addington Chinake.
In the rest of the region, whilst revenue fell by 14% in USD terms, driven by a 19 percent decline in customer counts offset by a 6 percent increase in average spend, translation into Zimbabwean dollars reflects a 500 percent growth.
Restrictive trading conditions prevailed in the six-month period under review, with Simbisa Kenya trading on 33% less counter trading hours compared to the prior year period.
Through aggressive marketing campaigns, value offerings and new store openings, the decline in customer counts was a more moderate 23% year on year and the impact on revenue was partly offset by an 18% increase in average spend, a result of increased deliveries with a higher basket value.
“With the gradual easing of trading restrictions in our operating markets, we expect an improvement in trading hours and with that a recovery in lost customer counts which will boost top line growth in the short to medium term.”B Dionisio – Simbisa Brands Chief Executive Officer
Its Zambian business faced challenges from significant exchange rate weakness and inflation rise putting pressure on consumer disposable incomes, increasing the cost of imported raw materials and impacting key costs for the business.
However, aggressive marketing and brand specific promotions achieved a 7% year on year increase in customer counts against the prior year same period.
Difficult operating conditions, temporary store closures during the restructuring exercise and the permanent closure of one counter in Mauritius led to a 10% year-on-year decline in customer counts.
Improved average spends realised through increased delivery contribution resulted in a more moderate 7% year on year decline in local currency revenue.
In Ghana, revenue remained flat on prior year and through significant efforts put into cost containment, operating profit improved significantly, growing 355% year on year.
Simbisa Namibia’s revenue was down 17% versus prior year with customer counts falling 22% year on year. Management’s success in rebasing costs resulted in a 51% improvement in the restaurant operating profit versus prior year.
Growing the Simbisa brand footprint was a key focus area in the Kenya, Zambia and Ghana operating markets whilst the priority was to turnaround the existing business in the other regional markets.
In the six-month period under review, 15 new counters were opened in the Region with 10 being in Kenya.
“With the gradual easing of trading restrictions in our operating markets, we expect an improvement in trading hours and with that a recovery in lost customer counts which will boost top line growth in the short to medium term,” said B Dionisio Simbisa Brands Chief Executive Officer.
Simbisa operates and franchises a selection of well-known Quick Service Restaurant brands to include Chicken Inn, Pizza Inn, Creamy Inn, Baker’s Inn, Fish Inn, RocoMamas, Nando’s, Steers, Galito’s, Ocean Basket, Grill Shack, Dial a Delivery, Vida e Caffè, Grab & Go, Haefelis and Vasilis.
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